Facebook Building New Product That Could ‘Kill’ Yahoo?

By Peter Roesler

President, Web Marketing Pros

According to a Yahoo source, there is a story out there that suggests that Facebook could be in the midst of building a new product that will directly compete with one of Yahoo’s major products that could conceivably ‘kill’ Yahoo.

Yahoo currently is one of the biggest sellers of ads on the Internet, with about $5 billion in revenue each year. If it were possible for a big chunk of that to go to Facebook, that would be killer news, indeed.

The word is that Facebook, which has been fighting a recent battle on fake ‘likes’, has come up with something very simple but powerful. It apparently has devised a way to prove to marketers that there is online advertising other than Google search ads that is worth blowing a great deal of money on.

It is the result of a new partnership with a new Nielsen competitor from Denver known as Datalogix. It could indeed upend the way online brand advertising works.

The Old Way

Here’s how regular advertising online works:

A marketer puts out a picture of their product and some fancy text on lots of Websites.

Consumers click to those sites. Some see the ads. A few click on them.

An unknown percentage of those who saw the ads go out and buy the product after they saw the ad. How many? Who knows?

The marketer adds up all the clicks and looks at overall sales trends before and after the ad campaign to determine how well it worked.

The New Facebook Way

Marketer puts out a picture and fancy text on Websites.

Consumers visit the pages. Some see the ads, and a few clock on them.

Some percentage of those who saw the ad go and buy the product.

As the product is sold, the retailer notes the email address of the shopper, as well as their address and phone number.

Facebook has the contact information of a billion people, looks at its logs to see if a user of theirs with that contact information saw the ad.

Facebook provides a detailed report to the marketer. It tells them what was the percentage of people who saw the ad and who went out and bought the product.

Now the advertiser can look at this detailed report and do a simple ROI calculation based on those who saw the ad and who went and bought the product.

This new process would close the loop on brand advertising in a way that only Facebook can. No Website has more brand advertisers than Facebook. No other site has as many users looking at brand ads, and no other site has all of the email addresses of users who look at Facebook ads.